Pernod Shakes Up Malibu With ‘Snowflakes’ as Sales Lag

Pernod Ricard SA is turning to cocktails, coconut snowflakes and tequila to revive flagging sales at its Malibu rum brand.

Pernod dropped to a 7.6 percent share of the U.S. spirits market, the biggest by volume, in 2010 from 8.4 percent in 2008, according to data compiled by Bloomberg. Competitor Diageo Plc is No. 1 with 23 percent, measured in millions of cases. Global sales of Malibu, a coconut-flavored rum, have been growing more slowly than Pernod’s top 14 brands as a whole, which also include Absolut vodka and Chivas Regal whisky.

“The brand’s been struggling to connect with the consumer in the U.S. for a number of years,” said Simon Hales, an analyst at Barclays Capital in London. Innovation is “clearly what U.S. consumers are demanding at the moment.”

Distillers are focusing marketing budgets on their biggest brands to drive sales, offering seasonal varieties and unusual blends to grab consumer attention. Pernod, France’s biggest distiller, is selling a festive version of Malibu with “flakes” of coconut and collaborating with hip-hop artist Ne- Yo on Malibu Red, a rum-and-tequila concoction to go on sale in the U.S. in March.